Realtors who mix sales with investing

Member since 2016 · 1 post · 1 vote

Who here is a realtor who does sales while also adding in investing as another stream of income? I currently do residential sales and would eventually want to scale back on working with buyers/sellers (escape the rat race) and get into the investing side for not only short-term gains (flips) but also long term wealth (buy and hold). Any feedback from anyone who has done this would be appreciated! Thank you!

1 Reply

19 views

Most Popular Reply

Grace Wang

Realtor · Denver, CO · Member since 2018 · 227 posts · 241 votes

@Ryan Kelly all the agents on our team house hack AND work with clients. Many of us try for 1 house hack per year...and one year passes extremely quickly. If you set a goal of purchasing a house hack every year for 5 years, you'll have that many investments under your name. The more investments you acquire, the greater the ability to scale up and invest on a larger scale. You will hopefully be able to use the cashflow from each house to cover all living expenses while taking advantage of the commission checks you make as a Realtor and applying it to scaling up on the investments side. Being an investor and realtor is dangerously smart ;)

2 Reply

See this reply in the discussion

5 Replies

Jump to latestLatest

Sort by

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
5y
I think most realtors on BP do as you describe both.. but bottom line there is nothing more lucrative than a successful real estate practice to build wealth so you CAN invest.

@Russell Brazil @Marcus Auerbach @Wayne Brooks
I mean all you have is the paltry MLS and NAR dues as fixed over head. nothing has more bang for the potential income buck as that. Then you supplement it with investments as most of us do and in whatever investment vehicle you choose to do.. Does not have to be rentals but it can be.. Myself I am an accidental builder and have enjoyed the upside of this industry last 7 years.. But if it was not for my steady income from transactional real estate I would never have qualified for well millions in construction loans.
So bottom line I would suggest a well balanced income approach. Nothing better in this market than to take a nice 700k listing have it go on MLS sell in 3 days with multiple offers and pocket 10 to 30k with NO RISK of borrowing money or fix and flip that does not work etc..
And I can tell you I know many high producing agents that own some real estate but its the high annual income that they receive year after year that affords their life style they dont run that lifestyle on 200 a door rentals.
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
2 Reply
- Russell BrazilBusiness Member
  Moderator
  Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
  5y
  Originally posted by @Jay Hinrichs:
  I think most realtors on BP do as you describe both.. but bottom line there is nothing more lucrative than a successful real estate practice to build wealth so you CAN invest.
  
  @Russell Brazil @Marcus Auerbach @Wayne Brooks
  I mean all you have is the paltry MLS and NAR dues as fixed over head. nothing has more bang for the potential income buck as that. Then you supplement it with investments as most of us do and in whatever investment vehicle you choose to do.. Does not have to be rentals but it can be.. Myself I am an accidental builder and have enjoyed the upside of this industry last 7 years.. But if it was not for my steady income from transactional real estate I would never have qualified for well millions in construction loans.
  So bottom line I would suggest a well balanced income approach. Nothing better in this market than to take a nice 700k listing have it go on MLS sell in 3 days with multiple offers and pocket 10 to 30k with NO RISK of borrowing money or fix and flip that does not work etc..
  And I can tell you I know many high producing agents that own some real estate but its the high annual income that they receive year after year that affords their life style they dont run that lifestyle on 200 a door rentals.
  
  Thanks for the tag Jay.
  I spend the majority of my time in real estate sales as a solo agent. I work primarily with other investors. Ill probably do about $25 million in sales this year as Im sitting at about $18 million now.
  I have a portfolio of properties that throw off a little over $100k a year in free cash flow. I imagine I will probably scale back once I hit a net worth in the $10m range.
  Most of the money I make gets invested, as my wife and rental income are more than we need to live on. Though I obviously invest in real estate quite a bit, I also invest in stocks. I max out my sep ira, my wifes 403b, and contribute to taxable brokerage accounts as well.
  Flips arnt that attractive tocme these days, as I can make as much on a sale often as a flip, while my money can grow in a rental or a stock.
  [email protected]301-893-4635 Podcast Guest on Show #192
  District Invest Group545 Reviews
  Website View Page
  1 Reply
Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
5y
I run a team of 30 agents and also have been investing for 30 years. I train all of my agents how to invest on their own so they don't waste that part of their license by doing busy work all the time. You don't have to scale back on production as an agent, you have to build out a team, if you have the mindset and efficiency for it, as you focus on your own investing, but you can also focus on investors as clients which is what I do.
[email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
Zen and the Art of Real Estate Investing59 Reviews
Website View Page
0 Reply
Grace Wang
Realtor · Denver, CO · Member since 2018 · 227 posts · 241 votes
5y
@Ryan Kelly all the agents on our team house hack AND work with clients. Many of us try for 1 house hack per year...and one year passes extremely quickly. If you set a goal of purchasing a house hack every year for 5 years, you'll have that many investments under your name. The more investments you acquire, the greater the ability to scale up and invest on a larger scale. You will hopefully be able to use the cashflow from each house to cover all living expenses while taking advantage of the commission checks you make as a Realtor and applying it to scaling up on the investments side. Being an investor and realtor is dangerously smart ;)

2 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
5y
In a traditional sense "investors" are investing their money and that has to come from somehwere. A lot of people have the expectation that you can build a portfolio from nothing, and while possible, most of these "free portfolios" that I see are in quite delapitated condition, especially here in Milwaukee.
I was an investor first and the money came from my well paid corporate job as an exec. When I quit my job and "retired" and rental income I did not plan to become a Realtor, it was a little by accident more than by design, but I get a lot of personal satisfaction out of the job.
It is easy to get distracted. Next to BRRRR I also started to explore new construction and a few other things and quickly learned that I had to many pots on the fire to do anything well. So today I focus on two things only, growing my agents team and growing my SF portfolio. That keeps me plenty busy.
What I have also seen is that the first 3 years of working as an agent my investing suffered, I just did not have the time and energy. Jay loves pointing out that great agents can make half a million a year and more (I believe his wife is a very successful broker), which is true. But I want everyone to know that the average agent makes some $35k a year and is basically broke. Some agents make 6 figures and only the top 1% makes more.
I have always been reinvesting cash flow in more rental properties, improving the assets we own and increasing rents. And I do the same thing with most of my brokerage income. What you realize is that with a growing portfolio you also have a growing need for equity and reserves and no matter how much you have, the enjoyment does not come from having it, but from growing it. I believe this is why most of us will keep going pretty much as long as we have energy to do so..
This reality is in stark contrast with the popular newbie idea to invest a little and then just retire and travel the world on $3,000 of cash flow from 15 doors. They are missing the point - REI is a long game and while cash flow is vital, equity is what it really is about.
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.